Correlation Between Pimco Senior and T Rowe
Can any of the company-specific risk be diversified away by investing in both Pimco Senior and T Rowe at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pimco Senior and T Rowe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Senior Floating and T Rowe Price, you can compare the effects of market volatilities on Pimco Senior and T Rowe and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pimco Senior with a short position of T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Senior and T Rowe.
Diversification Opportunities for Pimco Senior and T Rowe
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pimco and PRSVX is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Senior Floating and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price and Pimco Senior is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pimco Senior Floating are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Pimco Senior i.e., Pimco Senior and T Rowe go up and down completely randomly.
Pair Corralation between Pimco Senior and T Rowe
Assuming the 90 days horizon Pimco Senior Floating is expected to generate 0.15 times more return on investment than T Rowe. However, Pimco Senior Floating is 6.52 times less risky than T Rowe. It trades about 0.17 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.02 per unit of risk. If you would invest 777.00 in Pimco Senior Floating on October 9, 2024 and sell it today you would earn a total of 138.00 from holding Pimco Senior Floating or generate 17.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Senior Floating vs. T Rowe Price
Performance |
| Timeline |
| Pimco Senior Floating |
| T Rowe Price |
Pimco Senior and T Rowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Senior and T Rowe
The main advantage of trading using opposite Pimco Senior and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Senior position performs unexpectedly, T Rowe can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in T Rowe will offset losses from the drop in T Rowe's long position.| Pimco Senior vs. Pimco Rae Worldwide | Pimco Senior vs. Pimco Rae Worldwide | Pimco Senior vs. Pimco Rae Worldwide | Pimco Senior vs. Pimco Rae Worldwide |
| T Rowe vs. T Rowe Price | T Rowe vs. Sp Midcap Index | T Rowe vs. Ashmore Emerging Markets | T Rowe vs. Lord Abbett Diversified |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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